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Public-sector oil giant IndianOil Corporation (IOC) has said it plans to acquire stakes in liquefied natural gas (LNG) terminals at Mundra and Dahej in Gujarat and Dighi in Maharashtra.
“We are looking at taking stakes in terminals at Mundra, Dahej and Dighi,” said A K Marchanda, executive director, business development, Indian Oil Corporation.
IOC is looking at a 25 per cent stake in the Rs 5,200-crore LNG project in Mundra, which is being set up by Gujarat State Petroleum Corporation (GSPC).
In Dahej, Petronet LNG Ltd, India’s largest importer of liquefied natural gas (LNG), operates an LNG terminal with a capacity of 10 million tonnes a year, which is expected to increase 15 million tonnes at an estimated cost of Rs 2,950 crore by end-2016.
The eight-million-tonne LNG terminal at Dighi port in Maharashtra is being set up by Mumbai-based Hiranandani Group.
IOC, India’s biggest retailer of fuel for transport and industrial purpose, caters to almost half the country’s demand.
Speaking to Business Standard after signing a memorandum of understanding (MoU) with Kamarajar Port at Ennore, around 40 km from Chennai, on Saturday, Marchanda said that for over 50 years, IOC has primarily been focusing on the hydrocarbon sector as gas is emerging as an alternate fuel for the century. IOC sees a good opportunity to expand the portfolio.
IOC is in talks with three foreign companies for the proposed Rs 4,512-crore LNG terminal project at Ennore; it is also looking for shell gas in the US and other countries. Marchanda said the project has got the environment ministry’s clearance and the tender process will commence soon.
The Ennore project will go on stream in the next three to three-and-a-half years and it will be executed through a joint venture.
“We are talking to three large foreign companies, which can source LNG for us. If they are interested, we can give up to 10 per cent stake in the joint venture,” said Marchanda, who refused to disclose the names of the companies IOC is talking to.
It may be noted that the Tamil Nadu Industrial Development Corporation will have a five per cent stake in the joint venture. “IOC and the state government agency will have a 50 per cent stake, while the balance will be held by FIIs (foreign institutional investors) and the foreign partner,” said Marchanda.
The project will mainly cater to industries and households in Tamil Nadu, while it will also cater to customers in Bangalore and Andhra Pradesh markets, he said.
While the initial capacity of the Ennore terminal will be five million tonnes a year (mtpa), the company plans to expand it to 15 mtpa.
IOC has also signed an initial deal with Dhamra Port to build a five-million-tonne-a-year LNG plant in eastern Odisha with an investment of around Rs 5,000 crore. It could annually use 2.5 million tonnes of LNG from the Odisha terminal for its planned 300,000 barrels a day Paradip refinery and its existing Haldia and Barauni refineries, said Marchanda.
